Convertible bonds: a literature review and some market evidence

Details

Supervisors

Grégoire, Philippe ; Anjos, Fernando

Faculty

Louvain School of Management

Degree label

Master [120] en Ingénieur de gestion

Abstract

The goal of this paper is to identify the determinants in the issuing decision of the convertibles and stock price fluctuation two days after an announcement. To do so, we review different papers to understand why we use convertibles and then apply the same methodology as Lewis (2003) used earlier. We apply this methodology to three different sectors, with larger samples than the ones used by Lewis. Furthermore, the selected period of our samples goes from 2001 to 2015 where in the previous study, the period was from 1979 to 1992. Our results show us that the economic environment has an important influence on the investor’s behaviors and therefore, on the determinants of the convertible bonds.